The 2024 US DTC Wine Market w/ Cathy & Chris Huyghe, Enolytics

XChateau Wine Podcast

With a second year of volume declines, 2024 has been challenging for the wine industry. Digging deeper into what trends are shaping the wine industry’s malaise, Cathy and Chris Huyghe, founders of sales analytics software platform Enolytics, have uncovered important insights into the US DTC wine market, including the decline of women and the divide between the affluent and middle class in wine purchasing. Enolytics has also developed a free service for the industry called EnoInsights, which is worth checking out.

Detailed Show Notes:

Enolytics launched b/c no one in wine knew what to do with their data

• Builds sales analytics software for the wine & spirits industry for both DTC and wholesale depletion data
• Customers primarily small (<$1M DTC revenue) & medium-sized, growing in larger wineries
• US, Canada, Australia - primarily US w/ 80% California

Partnership with WineDirect

• Exchange anonymized data every quarter and analyze it to build reports for the industry
• ~2k wineries in database, ~1k wineries analyzed after removing outliers

2024 DTC trends

• Revenue flat-ish, volumes down significantly
• Women purchasing less (-4%) - overall (-3%), men (-2%); reverses a recent trend of women buying more wine, not generationally different, impacting white (-5%) and rose (-10%) more than red (-2%)
• Affluent areas are doing better (flat revenue, lower volume), middle-class & poorer areas are down more
• Wineries increasing pricing (+5% through Q3 2024), AOV up due to pricing
• VA is doing reasonably well, CA - particularly Napa and Sonoma, hardest hit - they largely depend on tourism (70% of purchases from people outside CA), Central Coast CA is not down as much (70% of purchasers from CA)

Hospitality/visitation declined 7% (# of purchasers) in 2024 (also declined in 2023)

• Impacts wine club sign-ups, with hospitality the main club sign-up engine

Wine club growth -3% (# of members) in last 12 months

• 2020 +7%, 2021 +11%, 2023 -1% (20% attrition through Q3, 28% total; 19% sign-ups), 2024 -2% (19% attrition, 17% sign-ups)
• Club doing best of all major DTC channels - revenue flat, volume down
• Less expensive wineries getting hit more (less affluent customers)
• Customizations up - 20% of shipments, higher revenue per shipment
• Avg club tenure falling
• Best practices - better training of tasting room staff, use data to manage attrition (Enolytics has an algorithm to determine attrition risk; wineries that use it see 20% less attrition than average), use data to target customers to join the wine club (high spenders that are not in the club)

Website sales have the most significant room for growth, -42% since 2022, still up from pre-pandemic

• 2020 +250% in online sales
• Texting, “concierge” services, more targeted telemarketing (highest AOV channel, 6x tasting room; potential to leverage tasting room staff)
• Average winery emails the entire list, gets lots of unsubscribes, recommends hyper-segmentation, creates messages for 100-200 people

Events - same levels as 2022

• Opportunity to take tasting room on the road
• Recommends targeted events with a specific goal
• Go to places where there’s an existing customer base

Cross-channel marketing can be effective, e.g., using DTC data to sell out a restaurant event

Wholesale data partner - VIP - includes “can buy” and “lost” accounts

Regional wine marketing boards (VA, Paso Robles) engaging Enolytics to do studies on DTC data - currently doing baseline analysis and onboarding more wineries, sending quarterly reports

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